China sets GDP growth target of 5% in 2023

On Sunday, Chinese Premier Premier Li Keqiang released his work report.  The report stated that China has set a GDP growth target of 5% for 2023.  China’s GDP grew by 3% in 2022.

Financial experts anticipated that China would forecast a GDP target of above 5% for 2023. The average forecast for growth is 5.24%, according to CNBC analysis.

China has set a target of 3% for the consumer price index, and a 5.5% unemployment rate for those living in cities.  They are aiming to create approximately 12 million new urban jobs. This is an increase of last year’s target of “over 11 million.”

The work report requested that a “prudent monetary policy” be put in place in a “targeted” way. The deficit-to-GDP ratio is expected to rise to 3% from 2.8% last year, the report said.

Li delivered the report on Sunday at the opening of the National People’s Congress, part of the annual “Two Sessions” parliamentary meeting. This will be Li’s last congress session as Premier.

The report documented leadership changes in the central government and eight priorities to boost the Chinese economy.

Consumption and investment have been noted as the highest priorities followed by improving the industrial system and lending support to non-state owned businesses.

Other goals were “intensifying efforts to attract and utilize foreign investment,” “preventing and defusing” financial risks, stabilizing grain production, continuing green development and improving social programs.

“We should strive to develop the digital economy, step up regular oversight, and support the development of the platform economy,” the English version of the report said.

The report also discussed real estate and pledged to “help resolve the housing problems of new urban residents and young people.”

“We should ensure effective risk prevention and mitigation in high-quality, leading real estate enterprises, help them improve debt-to-asset ratios, and prevent unregulated expansion in the real estate market to promote stable development of the real estate sector,” the report said.

This year, the Two Sessions also intend to formalize government titles for the new premier, vice premiers and heads of different ministries. This year’s National People’s Congress is scheduled to end on 13^th March.

“Given the complete reshuffling of the government, a key issue to watch in the next few months is how the new leaders will boost private sector confidence,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. “This is more important than the fiscal and monetary policies, in my view.”